Online Stockmarket Trading Update

US markets rose overnight to reach fresh 2-year highs as the latest round of economic data showed the recovery is still on track.  European markets rose, extending their winning streak to 3 consecutive sessions, with the Stoxx Europe 600 index up 10.9% for the year.  Asian markets ended mixed, with the Japanese market drifting lower and banks weighing on the Chinese market.  Commodities prices were mixed.

The SPI Futures is above its key weekly pivot level of 4700 closed up 0.4% (or 17 pts) at 4,786.  The key levels for our index this today are 4820 and 4760. M&A activity continues to drive specific stocks. 

The ASX is set to open higher this morning, as we had generally positive leads from overseas markets.   It is a busy Ex-dividend day (see below), and we expect miners and banks to again see support today.

Continue looking at small and mid cap stocks to outperform, as we see some “window-dressing” by fund managers trading into the year’s close. Also expect trading volumes to fall.

US Markets

US markets rose overnight to reach fresh 2-year highs.  The latest round of economic data showed the recovery is still on track.  Gross domestic product (GDP) rose at a seasonally- and inflation-adjusted annual rate of 2.6% in July through September, above the previous estimate of 2.5%. However consumer spending rose by less than previously estimated, while company inventories increased by more than forecast.  Elsewhere demand for used homes increased by 5.6% to a seasonally adjusted annual rate of 4.68 million, less than expected, but the price for an existing home edged up for the first time since August. 

Financial stocks led gains giving investors more confidence in the current stock market rise, as they continued to benefit from recent deal and merger activity.  Regional banks stocks in particular have been outperforming, as investors search for the next potential acquisition targets.  The outstanding performing sectors were Financials up 1.1%, Energy sectors rose 0.4%, and Consumer Discretionary sectors recovered up 0.4%.

The Dow closed up 0.2% (or 26 points) at 11,559 while in the broader market the S&P 500 index up 0.3% (or 4 points) at 1,259 and the tech-heavy Nasdaq ended up 0.2% (or 4 points) at 2,671.

European Markets

European markets rose, extending their winning streak to 3 consecutive sessions.  The Stoxx Europe 600 index rose 0.1%, and is up 10.9% since the beginning of 2010. Autos and banks rose again supporting the up-move in Europe.  Banks also rose in line with their US counterparts, as sentiment in the eurozone was helped after yesterday’s comments from China expressing support for European Union measures to tackle the eurozone finance crisis plaguing the PIIGS – Portugal, Spain, Ireland and Greece.  In Germany the market fell marginally, but airlines rose, recovering some of the recent lost ground owing to harsh winter weather disrupting flights across Europe and the UK.  The German market has backed off, attributed to portfolio “window dressing” as fund managers acquire the best performing stocks while selling off weaker performers before closing their books for the year.

In London the FTSE 100 index closed up 0.5% (or 32 pts)  at 5,983, the German DAX closed down 0.1% (or -10 pts)  at 7,067, while in France the CAC closed down 0.2% (or -8 pts)  at 3,919.

Asian Markets

Asian markets ended mixed.  The Japanese market drifted lower after weaker than expected exports data and profit-taking ahead of a market holiday today. Exports in November rose 9.1% (below the 10.8% forecast), but it did mark the first rise in the pace of export growth in nine months.  In China banks stocks fell after a report that said the People’s Bank of China may start setting lending quotas for banks based on their capital adequacy ratio, liquidity conditions, provisions for bad loans and loan-to-deposit ratio, rather than setting an annual loan quota for the country’s banking sector.  Sinopec rose 2.4% after an unexpected fuel price hike in China.

In China the SSE Composite closed down 1.8% (or 51 points) at 2,904, while in Hong Kong the Hang Seng Index was up 0.2% (or 51 points) at 23,045 and in Japan the Nikkei 225 Index was down -0.2% (or -24 points) at 10,346.

Commodities

Copper remained around record levels again, on continuing concerns that demand will outpace supply into 2011 driving prices higher.  Gold is higher, still below $US1,400 an ounce, while crude oil rose. The Dollar Index was up 0.1% at 80.67 on the lower Euro, while the Australian Dollar last traded at 99.52.  Commodities were generally mixed.

Benchmark crude NYMEX for December delivery was up 0.9% (or $US0.80) to settle at $US90.66. Copper prices backed off around 2-year highs, with copper for December delivery down 0.1% (or -0.2 cents) at $US4.2700. Gold prices were off all-time highs again, with December gold down -0.1% (or -$1.40) at $US1,386.20.

Key International News Drivers Today

Tags: ASX News, BHP, Business News, Crude Oil, European Markets, gold price, Stock Market Analysis, stockmarket, US Market wrap

This entry was posted on Thursday, December 23rd, 2010 at 9:08 am and is filed under Morning Wrap, Stock Market Analysis. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.